How a Los Angeles venture studio is transforming corporate innovation by solving problems before building businesses
Based on an interview with Kyle Emory from UP.Labs on the Venture Cast podcast with Daniel P. Reynolds (link below)
The Venture Studio Revolution
While traditional venture capital funds write checks and offer advice, UP.Labs has engineered a fundamentally different approach to building startups. Operating as a venture studio in Los Angeles, they’ve created a systematic methodology that addresses the core challenge plaguing both corporate innovation and early-stage ventures: building solutions before validating problems.
In a recent conversation on the Venture Cast podcast, Kyle Emory—who leads business and growth functions at UP.Labs—walked through their unique model. “We’re a startup building startups,” he explains. But unlike traditional accelerators or studios, UP.Labs operates within a unique ecosystem designed to derisk venture creation from day zero.
The Four-Quadrant Ecosystem
UP.Labs’ model rests on four interconnected components that create what Emory calls their “distinct advantage”:
The Lab Team: Composed of executives from the corporate venture capital world who’ve built hundreds of ventures, combined with operators and builders from specific verticals. This isn’t a team of theorists—they’re practitioners who understand both the strategic and tactical realities of building businesses.
Venture Partners: Through their partnership with UP.Ventures Partners, UP.Labs secures seed funding for the ventures they create, eliminating the typical funding gap that kills promising ideas.
Corporate Partners: Strategic companies like Porsche, Alaska Airlines, and JB Hunt serve not just as customers but as co-development partners. They provide access to core problems, data, systems, and—critically—become the first customers for the solutions UP.Labs builds.
World-Class CEOs: Rather than founder-led ventures, UP.Labs recruits proven executives with $100M+ exits to scale the businesses post-incubation. These aren’t first-time founders learning on the job—they’re veterans executing playbooks they’ve run successfully before.
The Derisking Methodology: From Problems to Businesses
UP.Labs’ process unfolds across clearly defined phases, each designed to eliminate risk before advancing:
Phase 1: Problems Worth Solving (Months 1-3)
The journey begins with problem identification, not ideation. Corporate partners bring 40-50 problems to the table. The UP.Labs team then rigorously validates which problems are specific to that partner versus broader market frustrations.
“We’ll explore hundreds of different problems,” Emory explains. “Within those problems, we’ll try to discern which ones are specific to your business and which ones are broader problems that market is facing.”
This validation process involves extensive stakeholder interviews—advisors, experts, industry insiders—building a comprehensive view before committing resources. The 40-50 problems narrow to six, then to four problems worth solving.
Evidence-led decision making drives every step. No assumptions. No founder intuition alone. Just systematic validation that a problem is real, significant, and solvable.
Phase 2: Businesses Worth Building (Months 4-6)
Once problems are validated, ideation begins. The team generates 40-50 concepts around those four core problems, leveraging both entrepreneurial experience and emerging technology capabilities—particularly advances in AI and automation.
Each concept undergoes rigorous market testing before any code is written. The corporate partner validates whether the solution addresses their friction. Prospective customers in the broader market confirm the problem exists for them too.
“We’re very much evidence-led,” Emory emphasizes. “We test the concepts before we’ve built anything.”
The 40-50 concepts narrow to five for the investment committee, then to four for deeper analysis. Here, the team maps out business models, go-to-market strategies, competitive landscapes, and technical architectures. They’re building complete business plans before building products.
Finally, the committee selects two ventures to build. Not four. Not six. Two ventures that have survived multiple validation gates and demonstrated genuine market potential.
Phase 3: Building Enterprise-Grade MVPs (Months 7-12)
With two validated businesses greenlit, the incubation sprint begins. But this isn’t typical startup scrappiness—UP.Labs aims for enterprise-grade solutions from day one.
“The speed at which we move creates truly an MVP,” Emory acknowledges, “but we’ve been working through how we get a little bit further ahead on the viability of our MVP. How can we make this closer to enterprise-grade level so that by the time we’re at the end of our sprint, that product is ready to be commercialized?”
The commercial team works in parallel, ensuring the product roadmap incorporates broader market needs beyond the initial corporate partner. They’re building sales pipelines, conducting customer discovery, and preparing go-to-market materials—all while the product team codes.
Pilots run with the corporate partner. Letters of intent are secured from future customers. The CEO recruitment process intensifies.
By month 12, the venture graduates with a functioning product, validated customers, and an executive team ready to scale.
The Vertical AI Advantage
UP.Labs’ corporate partnership structure creates an unexpected strategic advantage in the AI era: depth over breadth.
“A lot of startups would be focused on going wide,” Emory notes. “You have a lot of horizontal applications versus vertical applications because investors oftentimes are like, ‘This TAM isn’t big enough for me.’ Now that narrative is changing where people are very much interested in going for these particular industries.”
By partnering with industry leaders like Porsche or Alaska Airlines, UP.Labs gains deep access to vertical-specific data, workflows, and challenges. They become genuine experts in narrow domains—truck trailer manufacturing, aviation operations, automotive ecosystems—rather than generalists building horizontal tools.
This depth enables AI solutions that would be impossible for traditional startups. Custom AI models trained on proprietary data. Workflows optimized for specific industry dynamics. Solutions that integrate seamlessly with legacy systems because the team understands those systems intimately.
“After a two to three-year period, I’m an expert in this space and I understand the dynamics of this market,” Emory explains. “I’ve built my first couple startups in that space. Imagine what it’s going to be like when I build my next two.”
A Real-World Example: Transforming Manufacturing Sales
One current UP.Labs venture tackles the cost pricing and configuration (CPQ) challenge in truck trailer manufacturing. Large manufacturers face a recurring problem: customers want custom trailers, but translating customer needs into engineering specifications creates massive delays.
“You could ask a lot of these different manufacturers—not just in truck trailer, but in any custom made-to-order, engineer-to-order businesses—it’s very common that you’ll see that… it’s like, ‘I want to go buy 100 trailers.’ ‘Great, how much does it cost?’ ‘Well, I’ll come back to you in two weeks.'”
The UP.Labs solution: a guided selling platform powered by vertical AI. By analyzing historical quoting patterns and configurations, the system pre-packages common solutions for sales representatives. Customization still happens, but from an optimized starting point rather than blank pages.
The result addresses a specific KPI: quote turnaround time. Measurable. Valuable. Scalable beyond the initial partner.
The 3-Year Exit Strategy
Perhaps UP.Labs’ most distinctive feature is their accelerated exit timeline. While traditional VC operates on 5-7 year horizons, UP.Labs builds with 3-4 year exits in mind.
Corporate partners receive an option to acquire the ventures they helped create—essentially buying back solutions to their own problems, now proven in the broader market. This creates alignment across all parties: faster returns for investors, solved problems for corporates, and proven businesses for acquiring companies.
Lessons in Systematic Innovation
Three years into their journey, UP.Labs has learned critical lessons about venture building at speed:
Enterprise-grade matters from day one: Early MVPs that were “truly prototypes” created friction during CEO transitions. Now the standard is enterprise-ready solutions that can scale immediately.
Transitions are critical: Moving from lab team to independent company requires careful orchestration. UP.Labs is evolving toward extended support services—centralized engineering that continues serving portfolio companies beyond the initial incubation.
Productize the methodology: Just as agencies evolve from service to product, UP.Labs is building internal tools to make their venture creation process repeatable and optimized. The future includes proprietary vertical AI solutions that accelerate startup building itself.
The Abundance Mindset Model
“We’re very much abundance mindset people at UP.Labs,” Emory concludes. The model creates winners across the board: corporate partners solve critical problems, investors see faster returns, entrepreneurs lead de-risked ventures, and customers get solutions purpose-built for their needs.
This isn’t corporate innovation theater. It’s systematic venture building that front-loads risk elimination, validates before building, and executes with precision.
For corporate partners, the question isn’t whether to innovate—it’s how to innovate effectively. UP.Labs provides a blueprint: partner deeply, validate rigorously, build systematically, and scale with proven leadership.
The venture studio revolution isn’t about more startups. It’s about better startups, built the right way, solving real problems from day zero.
UP.Labs is based in Los Angeles and operates as part of UP.Partners/UP.Ventures. Their portfolio includes ventures built in partnership with Porsche, Alaska Airlines, JB Hunt, and WABASH, among others.
